Chipotle exceeds expectations for second quarter

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Brian Niccol, the former CEO of Taco Bell, is bringing Chipotle closer to his former home base. Chipotle, which is now helmed by Niccol, announced earlier this year it would relocate to Newport Beach from Denver. (KEVIN SULLIVAN / Orange County Register) (AP Photo/Mark Lennihan)

Chipotle is getting some tailwind from its latest earnings report as it prepares to move west.

The Denver-based company had a “solid second quarter” with sales above expectations, chief executive officer Brian Niccol told investors in a conference call Thursday afternoon.

Revenues increased 8.3 percent to $1.3 billion in three months ending June 30. Customers spent more during the period, due to a 4 percent price hike and the addition of queso to the menu. Customer traffic dropped 1.8 percent.

Net income, however, deceased 29.7 percent, from $66.7 million to $46.9 million, some of it due to expenses from restaurant and office closures.

Nevertheless, investors liked the numbers, with stock leaping from $446.76 to $474 after closing.

The move to Orange County wasn’t discussed in the conference call, but Niccol focused on other initiatives, including become more “culturally relevant”; increasing digital sales and making it easier for customers to pick up online orders; increasing deliveries; improving employee training; and expanding the menu without disrupting the chain’s current assembly line.

In a Q&A, Chipotle executives said they weren’t ready to start formally testing menu items developed in its Next Kitchen in New York City. In June, it showed off some of them to the press, including quesadillas, tostadas, and a Mexican chocolate shake.

Fielding Buck has been a business reporter since 2014 with a focus on logistics, supply chain and GIS. Prior experience includes extensive entertainment reporting. He loves photography and dogs and lives in San Bernardino County.